Video Webcast

60 seconds with Rajeev De Mello on Fed rates and emerging markets


Rajeev De Mello

Rajeev De Mello

Head of Asian Fixed Income

The Fed's lift-off and increases in interest rates is something which investors have been very worried about over the last couple of years. When you look back over the last 30 years, every time the Fed has moved interest rates, or talked about moving interest rates, it's been a concern for investors in emerging markets and Asia.

This time around it's no different – ever since May 2013, when Ben Bernanke made his speech about tapering Quantitative Easing, emerging market investors have been concerned and the asset class has moved sideways, global investors have withdrawn money and there have been concerns about various countries. However, when one looks back carefully, it is generally the preparation of the Fed's lift off which causes that most concerns to emerging markets and to Asia. However, once the Fed does start its lift-off, markets tend to be calmer and this time we think is no different. The Fed in addition is going to be gradual – it has announced that – and there is no pressure from inflation in the US either. So this gradual Fed, we think is going to be positive for emerging markets and Asia.

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